This is a common question I get asked by small business owners, either questioning their own performance or that of their sales team.
The month has started slowly and despite a flurry of focus and activity, it doesn’t pick up and the month ends miles off plan.
For a majority of business owners, the lead-time or burn time as I call it is typically three to four months. This is the average time from a (qualified) prospect engaging with you and them placing the order.
So, when you have a poor sales month, it is rarely what you did or didn’t do this month. It is what you did or didn’t do three to four months ago.
Here are the usual reasons why:
- Maybe your workload meant you didn’t have the time to prospect?
- Perhaps you felt you didn’t need to due to performance?
- You were on holiday/ you thought your clients were away?
- Maybe your sales team took their foot off of the pedal?
Either way, you need a better system and greater tracking of your numbers to monitor progress.
Rather than measure sales orders or revenue as an indicator of progress, try measuring the value of your next quarter’s pipeline.
What is the value of qualified leads you have that are likely to convert in the next three months? What is your average conversion ratio over the last six to 12 months?
Let’s say you want to achieve sales of £50k per month. You have £200k of qualified leads in your pipeline and your historical conversion ratio is 50%. Therefore, you are likely to land £100k of sales in the next quarter, £50k short of target!!
This is a problem as you have committed to expenditure assuming sales will land.
You either need to ramp up your sales and marketing strategies to increase the pipeline value or hope that your selling skills get you a higher conversion ratio.
As a business owner, you have to make sure you have the systems in place, the team focussed and clear numbers to measure progress so you are not having poor sales months.
There are only 12 months in a year and missing target on one, puts you on the back foot.
Ensure your sales and marketing activity is high, even when workload suggests you don’t have the time or don’t need it.
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